09 February 2019

Bitcoin in the News : 2019-01 More++

In the first post this month, Bitcoin in the News : 2019-01 Price, I noted,
Except for that plateau between 5 January and 9 January, the trend for the month was a gentle but steady downward fall.

Looking at that 'plateau' a little closer, I see a steady price around $3800, followed by a sharp jump to $4000 which holds for a few days, followed by a sharp drop to $3600 which is the real start point for the 'steady downward fall'. I found two stories from the same source that bracket the plateau. Here's the first:-

  • 2019-01-07: The Bitcoin Price Has Leaped Sharply Higher -- Here's Why (forbes.com) • 'Just ahead of the bitcoin market spike last night a bitcoin whale moved some 2,500 bitcoin (worth just under $10 million) on the Luxembourg-based Bitstamp exchange, according to the Twitter price tracking bot Whale Alert. The move pushed the daily bitcoin volume up to over $5 billion, a 2019 high.'

It's not clear how a 'move' (is that a buy or a sell?) of $10 million results in a total of $5 billion, but I'm here to learn. The other side of the plateau was explained in a second story:-

So someone published 'market research' about 'a decline in investor sentiment' and everyone rushed for the exit? Later the same story mentioned,

Robust Twitter Activity: Before the widespread declines in digital currency markets, the top digital currencies experienced a greater number of tweets. [...]

Technical Analysis: While analyzing social media activity can help grant insight into the sentiment of traders, it is not the only tool that can be helpful in this respect. Technical analysis can also help shed some light on sentiment by looking at key market activity.

This confirms my current understanding of bitcoin price action. Since the cryptocurrency has no tangible underlying value, its price movement is driven entirely by 'investor' (a better word might be 'speculator') psychology.

[As an aside, the previous story looked like this on my screen...

...The real story occupies less than 25% of the screen space. The large ad in the top half starts to repeat in the lower right (it's in Dutch because I live in the Flemish region of Belgium) and the blue rectangle is a video. When I scroll down, the video switches to the lower left and follows my scrolling while the ad 'Fysiek Goud Kopen' ('Buy Real Gold') slides down the right side of the screen. Quel horreur!]

That little detour gives me an excuse to introduce the next theme: the number of stories that mentioned gold. The number of January bitcoin stories flagged by 'Google News' alerts was more than double the number in December, and more than any previous month. I saw from this little analysis that the bitcoin/gold connection has always been a recurring theme. Here are three stories that made my short list for the month:-

That third story references the first, making it clear where the theme started. The word 'bet' at the end of the next quote is appropriate:-

At the forefront of the bitcoin vs. gold movement are Cameron and Tyler Winklevoss, the founders of New York-based crypto exchange and custodian of Gemini Trust Co. The twins argue that bitcoin’s fungibility and divisibility -- thanks to its fixed and known supply -- make it a better bet than gold.

One more theme for the month is worth a mention. Three months ago, in Bitcoin in the News : 2018-10 More++ (November 2018), I quoted Reuters: 'Bitcoin ... celebrates its tenth birthday on Wednesday [31 October]'. Now I learn:-

There were other January stories I could flag, but I'll stop here. In fact, for the first month in a long time the number of stories about bitcoin price seemed less than the number of other stories. I would 'bet' that's a positive sign. Markets tend to rise gradually when they are out of the spotlight.

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